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TEXTBOOK: Ch. 2 notes - Coggle Diagram

- - - - points on the PPF line are efficient
        
        meaning that combinations that are on the PPF line are at the lowest possible cost
      - points outside the PPF line are inefficient because you are sacrificing more than necessary for one thing, to achieve more of the other
        
        meaning, there are some "resources" that are not used (or "misallocated", or both), which could've been used to produce either goods
        
        unused, as in, having the potential to be used, but not being used for some reason
        
        misallocated, meaning: resources are not matched up in the most productive way
        
        for example: assigning cola workers to work at a pizzeria, and pizza workers at a cola factory
  - - - see first graph of ch. 2 for reference
  - - - as you "move along" the PPF line
    - - in short: the opportunity cost of product A = inverse/reciprocal of the opportunity cost of product B
      - for example
        
        if you have to sacrifice (opportunity cost) 3 cans of cola to produce a pizza, then: you have to sacrifice 1/3 of a pizza to produce a can of cola
  - - - in the case of cola and pizza (the example in the textbook): the more pizzas you produced, the greater the number of cans of cola you lose becomes (meaning, the opportunity cost of making pizza increases)
    - - when a large quantity of pizza is produced, along with a small quantity of cola being produced: it shows as a steeper slope on the graph
        
        A given increase in the quantity of pizzas costs a large decrease in the quantity of cola, so the opportunity cost of a pizza is a large quantity of cola.